Occupying the Money System: Enric Duran introduces Fair.Coop

“What was missing for us to start out on this path was a monetary initiative present in these markets which, instead of relying on human competition to retain the greatest value, would be based on human cooperation as equals, creating value for all. With the arrival of Fair.Coop, faircoin has become the cryptocurrency focused on the social cooperation that was missing.

Enric Duran initially approached us during the late spring. He’d read Michel Bauwens’ policy paper for Transitioning to a Common Based Society and said that he was interested in collaborating with the P2P Foundation on a number of projects. When we asked for his impressions on Michel’s policy paper, he replied, “Yeah, we’re already doing half of what you describe in the paper at the CIC (Catalan Integral Cooperative)…now we want to do the other half”.

Monetary and economic theories centered on the fairer distribution and stewardship of the earth’s wealth abound. As invaluable as these theories are, we’re still sorely lacking practical examples to refine and adapt them to local and transnational realities. Something similar has happened in the realm of cryptocurrencies. While people are understandably excited by Bitcoin and its potential, I think that it’s a stretch to believe that a cryptocurrency with a Gini coefficient higher than traditional fiat currencies, combined with the fact that 1% of Bitcoin owners hoard 50% of the wealth, will do much to address global social inequality. Thankfully, alternatives abound, but many of them remain theoretical at best, and at worst, mired in never-ending discussions about whose monetary theory is the best, and why the rest are naive.

Back to Duran and Fair.Coop. The punk rock spirit that underlies the Fair.Coop initiative is admirable. Infused with an attitude transcending punk’s DIY ethos and arriving at a DIWO (Do it with Others) position, Fair.Coop has decided to tackle the big picture, reaching out to people and collectives who want practical action to offset the abundance of rhetoric. Rather than undermining the wealth of theoretical work promoting new models of monetary creation and wealth distribution, initiatives like Fair.Coop can only strengthen the validity of such work (in my opinion), feeding back into it and refining proposed approaches.

Whether the project succeeds or not, the experience and insights gained will prove to be invaluable. It is also worth mentioning that Fair.Coop isn’t merely a stunt designed to engorge a cryptocurrency detached from any social or environmental responsibilities. Instead, it is a working project for a whole financial eco-system as articulated by the P2P Foundation’s proposed guidelines for Open Cooperativism, which underlie the transnational structure of the coop. I won’t describe the project itself here, for that you should read what’s copied below, originally published by Duran on his personal blog, where he offers a personal narrative and perspective on the project. For more technical details and an abundance of supporting material, please visit Fair.Coop’s excellent new website, and if you’re motivated to contribute, join their social network.

An open cooperative as a revolutionary tool for building a new global economy

By Enric Duran

Today I have not expropriated any banks, nor am I presenting anything which anyone can call illegal. I am not presenting a strategy directly related to my return to public freedom (perhaps contrary to what many may expect), although that does not mean I am not still defining that plan.

What I am presenting here is a revolutionary project on a global scale, a fruit of the immersion and learning afforded to me by 19 months of intense activity in seclusion and hiding.

The moment this project was born during my nights of creative solitude, it became clear to me that I had to make this both a priority and a reality before taking any risk as an individual. Today, I am pleased to have acted on that determination, and I hereby submit the project so that it may become everyone’s.

It is the open, global cooperative Fair.Coop, one more step in the extension of the integral revolution worldwide, along with P2P society values, open cooperation, and hacker ethics, among others.

Now I will explain some of the thoughts which inspired me to do this:

The blockchain and Bitcoin brought the world one of the few missing pieces to allow us to become independent from the old economic system. Old centralized and new decentralized systems have begun an open competition for domination of the future world. And, for the first time in thousands of years, decentralized systems now have another chance.

However, for those of us who understand the world in terms of cooperation, decentralization is not enough. We believe this new world needs self-organization and mutual support; cooperation needs to penetrate all the corners where domination has fallen behind.

The practices that model the everyday ways this other world could be are very much alive. Although these practices are starting to interconnect at a bio-regional scale, they are still too isolated; there is mutual ignorance among initiatives separated by thousands of kilometers, on different continents, based on different languages.

Large amounts of commons are being built in parallel at the local scale, but any one project’s evolution has so far been insufficiently shared with the others. We need more powerful tools to help us share our knowledge, and we must be able to finance their development.

We don’t want to remain spectators in the confrontation between the old oligarchical and the new netarchical capitalism. We also want a cooperative system on a global scale, just as we already practice it at local scale – and if we want to see it happen, we have to build it.

Therefore, we felt it was necessary to develop a project that puts social cooperation back on the stage where these dominance struggles between economic systems are playing out, and to show that the path toward putting human beings back at the center is possible, it exists, and it’s ready for us to expand.

This project has arrived, and is called Fair.Coop, The Earth Cooperative for a fair economy.

The initial push to boost this initiative is what we call, “hacking money markets to introduce the virus of cooperation”.

This means:

A cryptocurrency, negotiable outside the control of decentralized markets around the world, can be understood as social capital, in which the number of shares is equal to the total number of coins created .

If we choose it as our founding capital for a cooperative, it means that this capital, rather than being accounted in the dominant currency (euro, dollar), would be in a currency the system can not control. Additionally, as our cooperative project grows and provides resources and services of proven usefulness, the value of this capital and the entire cryptocurrency will grow accordingly.

This is an important point, and I will explain what this means in a different way to be sure it is fully understood:

In some transnational corporations, netarchical capitalism adds a third way to extract value: free collaboration between humans. For example, Facebook and Google ads generate a lot of money because we use their “free” services, while we in fact we are working for them, for free.

What if we were to create technological tools for cooperation between equals, and then use them to generate free knowledge, a global commons?

Well, then we could do the things which we like and consider helpful, such as cooperating, sharing, and learning, while letting the economic value of our work remain in cooperative projects, and even revert to ourselves.

Therefore, it became necessary to find a coin that was not controlled by old capitalism (euros / dollars…), nor exploited by the most innovative capitalism (Bitcoin), one in which we could incorporate our values and cooperative practices. With all this in mind, Faircoin was chosen.

After months of networking and creation, Fair.Coop is born today

The space is open to start cooperation among us all, and we have supplied the cooperative 10,000,000 faircoins, which represents 20% of total existing coins.

This social capital was injected into Fair.Coop with the following distribution:

And the following conditions:

Except for the Pooled fund which can be used to cover operating expenses at the discretion of the Ecosystem Council and the whole Fair.Coop, contributions to the other three funds can not be touched during a period of one year.

With the Global South fund, we call for a redistribution that can reach as many local projects as possible, prioritizing the empowerment of the areas and environments most under attack by the current system, generating a peer-to-peer cooperation environment to restore global economic justice.

As for the Commons and Technology Infrastructure funds, the call is to qualitatively prioritize projects that can most benefit the global common good.

This period may well serve to build a participatory, creative and mutually supportive process leading to decisions in relation to the right priorities, defined collectively and efficiently. Also, as collaboration between equals multiplies under all Fair.Coop and especially the FairNetwork, the value of Fair.Coop’s social capital is expected to respond by appreciating relative to fiat currencies – not forgetting, as a symbol of our independence, that 1 faircoin will always equal 1 faircoin.

This way, just for starters, 20% of the existing monetary resources remains in the hands of a participatory and open political process. Meanwhile, Fair.Coop will work to continue recovering resources for the common good which may be redistributed through the same funds.

So this time, if our collaborative and freely shared vocation is to benefit someone financially, it will be the same ones who are building it before anyone else, that is all cooperatives, and through the funded projects, all of humanity.

In other words, we have finally found a way to cooperatively organize, share, learn, and help; one that can self-manage without the need, at least in the most delicate initial phase, to depend on others, or to prioritize selling our production in the market, not even keeping up with regular member fees. All we need in this first phase is to create free knowledge, share and become interwoven the way we know best, extend the intangible, and build the material commons; build social currency networks based on faircoin, such as the Faircredit project already presented.

We can innovate to create value together in many areas of the commons.

We can each contribute our bit of knowledge, political participation, time, donations, products, services, investment, network-building, each based on their capabilities and priorities.

The market will value this by buying our cryptocurrency and pushing up the value of our social capital, in relation to other currencies. So, we can finally “squat” or “occupy” the forex markets, responsible for so much inequality, and recover from some part – large or small, only time will tell – of these injustices.

I can imagine that this all might seem contradictory to some anticapitalists – me, articulating the role of money markets in this project.

Anyone trying to quit using money, who has already done a lot of work involving community economy and direct exchange, can certainly go beyond Fair.Coop’s monetary initiatives. This does not prevent them from getting involved as one more in collective creation and political participation.

But most of us who often do use currency, whether fiat or social, for trading or saving, are dependent on a reference framework for prices and store-of-value function (which is imposed by central banks), so we are in some ways passive partners of the system we want to overcome.

Moreover, I would like to remind you that the foreign exchange market is an indisputible historical reality, over 100 years old, with a trend toward being less and less regulated. In recent years, only authoritarian states (such as the case of China, where value is set by government decision) have explored a second path in relation to how to deal politically with the market. Meanwhile, as far as I know (from sectors with related ideas, shared in the context of the integral revolution), despite having tried various pathways toward using social currencies as exchange tools, up until now there have been no previous approaches created regarding how to confront the forex market to build global economic empowerment.

In recent years, new cryptocurrency exchange markets have appeared, outside the control of governments. Therefore, it is no longer necessary to have a country and a central bank in order to have a currency that can be exchanged across the world. The banking system is outdated, and more and more of us are realizing it. The path we’re taking now is toward building something that will someday consolidate a global alternative.

What was missing for us to start out on this path was a monetary initiative present in these markets which, instead of relying on human competition to retain the greatest value, would be based on human cooperation as equals, to create value for all. With the arrival of Fair.Coop, faircoin has become the cryptocurrency focused on the social cooperation that was missing.

We will see over time whether the way we’re choosing is the best or not, but at least with this initiative we now have a path to explore, as far as addressing this global issue of how to create a more just economic system, with the level of social cooperation that this planet needs and the current technology allows.

NEXT POST

Overall aims and implicit positioning is a no-brainer to support but trying to explore the devil in the detail a little, for example:

i) the addresses of the four funds are presumably multi-sig controlled. Who are the signatories and is that information transparent.
ii) the remaining (as yet unallocated) 80% coins – again multi-sign and signatories?
iii) what process envisaged for evaluating ‘calls’ on fund usage, and transparency of process?
iv) what facilitating measures/ encouragements for acceptance of currency outside the core ‘enthusiasts
/ activists’ group?

Its an interesting architectural approach to currency design, but important decisions will be made by trusted members. A positive trusting view would see the project as a carefully designed channel for accumulating and organising activist resource; a negative view would see it as an attempt to leverage up the fiat exchange price of a new currency via the invested goodwill of committed but naive activists prior to pre-crash insider cash-in.

It increasingly seems to me that the governance *is* the currency, so these issues are central I think.

I got confused here:
>A cryptocurrency, negotiable outside the control of decentralized markets around the world, can be understood as social capital.
and
>this capital, rather than being accounted in the dominant currency (euro, dollar), would be in a currency the system can not control.

I’m not sure which ‘system’ Faircoin is outside control of. It seems that, as with Bitcoin et al., the markets will decide the price.

Stimulated by a post of this article on Facebook, I looked into the widely announced fairness of distribution of those faircoins that have already been minted and those to be minted in the future.

I also tried to understand the difference between and faircoin and faircredit; this latter one is intended to become the “internal means of exchange” of the participating co-operatives, while the former (faircoin) is described as a means of finance, capital accumulation and exchange with other currencies out there.

It seems to me that most of the initial issue of faircoins (minus 20% which was given to Fair.coop as a capital endowment) is in the hands of a few Bitcoin aficionados, those who were frequenting the Bitcoin forum when Faircoin was announced. So 80% of the capital, which is destined to grow in value thanks to the work of participating co-operatives, is essentially in the hands of the promoters of the currency.

Not only that, most of the current and future issue of faircoins is going to end up in those same hands, because of the fact that coins are minted, meaning that who has saved coins is going to win the mining race hands down.

So I would like to know how exactly this currency can be said to be “equitably distributed”.

Here is what I found looking at the available information on fair.coop and posted as a sequence of comments on the Facebook posting…

So from what I see this seems to be an alt coin which is a variation on the Bitcoin code, where issue of remaining future coins to be created, is done as a reward for either mining or minting. The reward is said to be mainly based on minting, which is the concept that your saved faircoins have value as they make the process of finding a block easier.

I haven’t seen anything on how the distribution of the first 50 million coins went, if there are any left or if they were all given away.

I haven’t seen anything either on whether there is a ceiling of coins to be created, and how the amount of coins to be created is regulated…

– – –

I see that faircoin is a crypto currency intended as a “store of value” while faircredit is to be the exchange currency (internal) for cooperatives.

I do’t believe faircredits have been launched yet.

– – –

I am still trying to understand the relationship between faircoins (the crypto currency said to be a savings vehicle) and faircredit (the exchange type currency).

Apparently faircredit isn’t credit at all as we understand it, but frozen fair coins… which have to be either mined or bought from who holds large amounts.

According to fair.coop: “Some of the activists pushing this project bought large quantities of faircoin at a very reduced price with the intention of redistributing it to projects that fall under the fairfunds (link) and revalue it by generating real value, in a cooperative way through fair.coop.”

– – –

The distribution pattern of existing faircoins, 50 million of them, which have been mined all in one go and were then either “given away” or “sold”, depending where you read, is not very clear.

From fair.coop: “FairCoin is a currency created with the purpose of promoting equality and economic justice. 50,000,000 Faircoins were created in March 2014 and on March 6 – 8 they were distributed through a massive give-away called airdrop at a rate of 1000FAC/hour to anyone who asked for it.”

Probably most of the coins went to those who were, at the time of the issue, “in the know”. Since buying faircoin involves having a bitcoin wallet with bitcoin in it, the majority of those give-away coins must have ended up in the possession of people in the bitcoin space, not so much people in the co-op space.

This is acknowledged on the fair.coop site:

“So FairCoin became the first currency which needed no initial mining but was distributed equitably to promote equality over financial possibilities. Still, obviously an airdrop on an Internet forum has a very limited scope and therefore the initial distribution isn’t quite efficient in its equity purpose.”

A bit of an understatement, I would say.

It would be interesting to see some statistics of who owns how many of those fair coins.

– – –

The distribution pattern of 50.000.000 existing fair coins is somewhat murky, probably largely limited to those who happened to be on the Bitcoin forum when the Faircoin airdrop was announced.

But not enough, the rest of the coins that are to be created at an initial rate of 6% per year destined to decrease to 1 and a half per cent per year, are surely going to majorly go to the same people. Since the reward mechanism for mining (called minting in this case) privileges those who have “saved” faircoin, practically all of the issue of fair coins is going to go to a few Bitcoin insiders, either through the initial distribution or through minting.

I think equitable distribution of the financial instrument, although professed loudly on the site and in announcements, is not borne out by the facts of how things work…

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WRITTEN BY

Stacco Troncoso

Stacco Troncoso (Spain) is the strategic direction steward of the P2P Foundation as well as the project lead for Commons Transition, the P2PF’s main communication and advocacy hub. He is also co-founder of the P2P translation collective Guerrilla Translation and designer/content editor for CommonsTransition.org, the P2P Foundation blog and the new Commons Strategies Group website. His work in communicating commons culture extends to public speaking and relationship-building with prefigurative communities, policymakers and potential commoners worldwide.

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